The Dangers of Using the 1-Per-Click Conversion Metric to Measure Campaign Performance

Occasionally Finch runs across businesses that are not aware of the differences between 1-per-click and many-per-click conversion metrics. Some advertisers, in fact, do not even realize that the many-per-click conversion metric exists. Other advertisers have heard of many-per-click conversions but think that the metric is something that has to be enabled using a setting or an either-or choice to toggle between 1-per-click and many-per-click.

The reality is; both conversion metrics are always enabled on all AdWords accounts. This is how it works: AdWords records all conversions that occur within 30 days after an ad click. Every new conversion increments the total number of conversions recorded. For example: If a user clicks on an ad, comes to your website, and converts – then AdWords will record one conversion. If that same user comes back to your website again within 30 days and converts again, then AdWords will record another conversion bringing the total to 2. This user could keep coming back and converting, and the conversion total would keep incrementing.

AdWords gives the advertiser access to this raw total number of conversions via the many-per-click conversion metric. This metric is perfect to use for optimization of any business that can tie direct, tangible value to each conversion. The prime example of this type of business is eCommerce websites: Every conversion represents direct, actual revenue and signifies real value to the company. Every time the user comes back to your website and converts again, it means additional revenue to the company.

If the many-per-click conversion metric is simply all of the conversions that AdWords records, then what is the 1-per-click conversion metric? The answer is this: It is a simplified lead de-duplication filter. The only conversion that is counted is the first conversion that occurs after the ad click, and all subsequent conversions by the user that may happen are not included. This metric is useful for businesses that are capturing leads or signups that only turn into direct revenue at a later date. In essence, all of the user’s activity is being boiled down into a unique customer acquisition action and treated as a single conversion. Businesses are then able to apply pipeline ratios to determine the average number of leads it takes for an eventual sale, and this in turn determines what each unique lead is worth.

The 1st danger

Now that we have been through the differences between the two conversion metrics, it is time to dig into the dangers of using the 1-per-click conversion metric for optimization. The first thing to bring up is that AdWords shows only the 1-per-click conversion metric by default in the campaigns, ad groups, keywords, and ads views. You have to choose to add the many-per-click conversion metric columns to these views, or you will never see them. This is one of the reasons why many companies base their optimization decisions around the 1-per-click conversion metric, even when it does not make sense for their business. They do not realize that the many-per-click conversion metric exists; they launch their campaigns and track their performance using the 1-per-click conversion metric, because it is the only one visible to them. They get comfortable using this metric, provide reports to management using it, and resist changing to something else in the future – even when the many-per-click conversion metric is clearly more applicable to their business.

As mentioned above, eCommerce websites are primary examples of when the many-per-click conversion metric is most applicable. Any business that chooses to measure performance using the one-per-click conversion metric for their eCommerce website is making a decision that hurts their company! Every additional many-per-click conversion represents direct, additional revenue to the company. It is clearly better for a business to have 2 completed shopping carts than 1. Therefore, it is best to use the many-per-click conversion metric to drive future campaign optimization decisions on eCommerce websites.

Note: Finch goes a step further for eCommerce websites and offers cost-per-value (CPV) optimization, which aims to drive the most revenue possible per advertising spend. The revenue in this equation is represented in the “Total conv. value” column in AdWords, which is another column that you have to choose to add to the default campaigns, ad groups, keywords, and ads views. This column is an implicitly many-per-click conversion type metric, as AdWords sums all of the value for all of the conversions recorded to populate it. There is, in fact, no one-per-click type metric for conversion value even available within AdWords. This means that when Finch uses the CPV optimization model, we are in fact also using many-per-click conversion metrics to measure performance.

The 2nd danger

The other main danger of using the 1-per-click conversion metric is a little more insidious. This danger occurs when the website has a unique lead/signup acquisition model which indeed matches to the 1-per-click conversion model; however the business destroys the effectiveness of their tracking by installing too many different conversion codes on their website. A lot of times businesses will install an array of different conversion codes to track various different activities such as a lead form, a PDF download, an online chat, etc. A user on their website only has to convert on one of these actions to make a conversion record in the one-per-click conversion metric. This means that there are activities being recorded that have varying degrees of correlation to an eventual positive outcome (sale, close, etc.). What the company needs to ask is this: Does a PDF download correlate as strongly as a lead form does to the eventual sale? To provide an extreme example (and one that we have seen numerous times at Finch) - what happens if a conversion code is also created for an “important” page view, which is a page that 50% of the visitors end up seeing? Perhaps only 2% of the visitors are filling out the lead form; however the 1-per-click conversion metric in this scenario is now showing a conversion for 50-52% of the visitors. Remember; the 1-per-click conversion metric shows a conversion for only the first conversion recorded, but this can be any of the conversion codes that are installed (and there is no way to restrict this). In this scenario, the page views are driving roughly 96% of the 1-per-click conversion metric. Would this company really want to drive as many 1-per-click conversions as possible – knowing that they are essentially emphasizing these page views instead of the lead forms? The page views may be “important,” but it is highly doubtful that they are anywhere near as “important” as the lead forms!

What does this mean? Any company desiring to use the 1-per-click conversion metric to measure their advertising performance should use as few conversion codes on their website as possible. Sticking to one code is the simplest way to go, but if more are added, the closer each code is in importance, the better. For instance: A company may have 3 different lead forms, which all have similar importance, so they end up using 3 conversions codes to track each. The company is safe because every conversion represents at least one lead form filled out. If it is not possible to have only conversion codes of equal importance on your website, then you should consider using the many-per-click conversion metric (even though you lose the lead de-duplication aspect), which allows you to target specific conversion codes of varying importance with corresponding emphasis. Finally, be careful about introducing new conversion codes to your AdWords account in the future when relying on the 1-per-click conversion metric for measuring performance. You may be setup correctly and running smoothly using the 1-per-click conversion metric when someone less informed comes along and installs that “important” page view code!